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China Evergrande shares swing as bondholders await word on payments By Reuters


By Anne Marie Roantree and Andrew Galbraith

HONG KONG/SHANGHAI (Reuters) – Shares of debt-laden China Evergrande Group swung wildly on Thursday as the company looked set to miss its second bond interest payment in a week, as an additional $180 million in coupon deadlines loom in the next month.

Shares of the company rose sharply, reaching 5.21%. However, they then reversed course and fell to as low as 7.7%. Evergrande Property Services Group dropped 4.2% after trimming losses to 0.6%. China Evergrande New Energy Vehicle Group plunged as high as 19.4%. The stock was last trading at 8.6%.

A bondholder offshore, who did not want to be identified due to the sensitive nature of the issue, stated that Evergrande had provided no information about his company’s $47.5 million semi-annual interest payment for its 9.5% March 2024 bond. This was as of Thursday morning in Asia.

Due Sept. 29, the coupon payment was due. Although it was unclear if payment could still have been made in the US, it was possible.

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Evergrande’s $305 billion in liabilities has raised concerns that its woes might spread throughout China’s financial system, and cause havoc around the globe. However, this worry has been eased by the Chinese central bank promising to help homebuyers.

Evergrande was once China’s largest selling developer. It is expected that it will be subject to one of the most significant restructurings ever undertaken in China. Evergrande prioritised domestic bondholders over overseas creditors.

Evergrande is silent regarding its offshore obligations. While Hengda Real Estate Group’s main unit announced that it had resolved an onshore coupon payment via “private negotiations” Sept. 23, Evergrande did not disclose details.

In a note, Jing Sima (chief China strategist at BCA Research) stated that “Regardless how the debt restructuring is done, Evergrande shareholders as well as investors in USD-denominated corporate bond bonds offshore will experience large losses.”

Evergrande’s offshore debt is nearly $20 billion. However, it also missed an $83.5 million coupon payment for another bond.

Both the Sept. 23rd coupon payment and its Sept. 29 counterpart have a grace period of 30 days.

By Oct. 30, the company will have to pay $162.38million in offshore coupons payments and a 121.8 million Yuan (or $8.84 million) onshore coupon payment.

($1 = 6.4641 )

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